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The "Debt Ceiling" Smokescreen


The media is ratcheting up “debt ceiling” hysteria to launch a surprise attack on Social Security and Medicare. President Obama has already stated that he’s willing to cut so called entitlements as part of a broader strategy for reigning in the debt. In 2011, during tense negotiations with GOP congressional leaders Obama made it clear that he was prepared to sell out his base by slashing vital funding to the old and infirm in order to reach a “grand bargain” with the opposition party. Here’s what he said at the time:

“We keep on talking about this stuff and we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up. Let’s do it. I’m prepared to do it. I’m prepared to take on significant heat from my party to get something done. And I expect the other side should be willing to do the same thing — if they mean what they say that this is important.”

At the time, Obama appeared to be ready to raise the eligibility age for Medicare in exchange for GOP approval of $1 trillion in higher revenues, that is, taxes levied on the 1 percent. Obama’s cuts to entitlements would have amounted to roughly $3 trillion, while the higher taxes would have only netted another $1 trillion. Rather than pushing for higher taxes on the rich, Obama chose to barter away the crumbs that are provided to the sick and needy to induce a compromise. According to Sam Stein at Huffington Post:

“The deal fell apart, in part, because Democrats demanded an upfront commitment from Republicans that they would allow the Bush-era tax cuts to be decoupled, rather than a commitment to revisit the issue at the end of 2013.”

Republicans adamantly oppose tax hikes on the rich. They don’t believe that the people who own the country (the 1 percent) should have to pay for its maintenance and upkeep. That’s the duty of the little people who punch clocks and sit in traffic for hours every day to scratch out a living.

On Monday, according to the New York Times, (Speaker) “John Boehner and other Republicans expanded their demands from changes in the health care law, which was passed in 2010, to broader budget reductions to Medicare and Medicaid…Describing the negotiations he wanted with Mr. Obama, Mr. Boehner seemed to shift from demands that the president agree only to defund or delay his signature health care law — a nonnegotiable condition, as Mr. Obama sees it — to calling once again for deficit reduction talks that would result in savings from Medicare in particular.” (“Boehner Hews to Hard Line in Demanding Concessions From Obama”, New York Times)

Readers can see how the media is subtly shifting attention away from defunding Obamacare to negotiations on Social Security and Medicare. The two-party duopoly is using the faux “government shutdown” crisis to set the stage for a “compromise” on slashing vital safety net programs during upcoming debt ceiling negotiations. Obama will use GOP “hostage taking” as the proximate cause for caving in, saying that he had to give ground to prevent a catastrophic default that would have pushed the economy back into recession. In an appearance on ABC’s lightweight News program “This Week,” Boehner more-or-less admitted to what was going on behind-the-scenes saying:

“Let’s look at what’s driving the problem. 10,000 baby-boomers like me retiring, every single day. 70,000 this week. 3.5 million this year. And it’s not like there’s money in Social Security or Medicare. The governments, over the last 30 years, have spent it all.”

“We know these programs are important to tens of millions of Americans, but if we don’t address the underlying problems, they are not sustainable.”

Patrick Martin at the World Socialist Web Site summed up Boehner’s performance like this: “He made it clear that, despite the right-wing populist demagogy of the Tea Party, the real enemy of the Republicans is not Obama, but American working people as a whole, and particularly the tens of millions of retired workers who rely on Social Security for their income and Medicare for their health care….” (“US budget and debt talks to focus on cutting Social Security, Medicare”, Patrick Martin, World Socialist Web Site)

Martin goes on to quote Treasury Secretary Jack Lew who appeared on NBC’s “Meet the Press,” and said, “The president remains prepared to negotiate on fiscal policy….We are happy to negotiate on reasonable policies with entitlement reform and tax reform that closes loopholes. That’s something that we would like to do.” (WSWS)

Obama has had his sites on Social Security and Medicare since he took office in 2008. It’s clear now, that he plans to use the cover of the stage-managed debt ceiling crisis to achieve his objective.

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. Whitney’s story on declining wages for working class Americans appears in the June issue of CounterPunch magazine. He can be reached at

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at

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